20090819interlocutory_order_no_30883.pdf

Office of the Secretary
Service Date
August 19,2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO MODIFY ITS RULE
LINE EXTENSION TARIFF RELATED TO
NEW SERVICE ATTACHMENTS AND
DISTRIBUTION LINE INST ALLA TIONS. )
CASE NO. IPC-08-
NOTICE OF
RECONSIDERATION SCHEDULE
INTERLOCUTORY
ORDER NO. 30883
On July 2009, the Commission issued Order No. 30853 approving Idaho Power
Company s request to modify its Rule H tariff addressing charges for installing new or altering
existing distribution lines. The Ada County Highway District, City of Nampa, Association of
Canyon County Highway Districts, and Building Contractors Association of Southwestern Idaho
all filed timely Petitions for Reconsideration. On July 29 2009, Idaho Power filed an Answer to
the Petitions. After reviewing the Petitions and our final Order, the Commission grants in part
and denies in part the Petitions for Reconsideration as set out in greater detail below.
BACKGROUND
Reconsideration provides an opportunity for a party to bring to the Commission
attention any question previously determined and thereby affords the Commission with an
opportunity to rectify any mistake or omission. Washington Water Power Co. v. Kootenai
Environmental Alliance 99 Idaho 875, 879, 591 P.2d 122, 126 (1979). The Commission may
grant reconsideration by rehearing if it intends to take additional argument. If reconsideration is
granted, the Commission must complete its reconsideration within 13 weeks after the deadline
for filing petitions for reconsideration. Idaho Code ~ 61-626(2). The Commission must issue its
order upon reconsideration within 28 days after the matter is finally submitted. Id.IDAPA
31.01.01.331-332.
THE DISTRICTS' PETITIONS
Ada County Highway District (ACHD), City of Nampa (Nampa), and the
Association of Canyon County Highway Districts (ACCHD) (collectively "the Districts ), allege
that the Commission s approval of Section 10 in Rule H exceeds the Commission s authority
granted by statute. Section 10 of Rule H generally pertains to the relocation of utility facilities
located in public rights-of-way and the allocation of relocation costs. ACHD further maintains
NOTICE OF RECONSIDERATION SCHEDULE
INTERLOCUTORY ORDER NO. 30883
that Section 10 is unconstitutional because it violates Article 8, ~ 2 and Article 7, ~ 17 of the
Idaho Constitution. ACHD Petition at 11. ACHD also requests that the Commission clarify its
Order and revise Section 10 ofthe proposed tariff. Id. at 15. Nampa and ACCHD also insist that
the Commission s Order fails to clarify the definitions of "third-party beneficiary" and "local
improvement district." Petitions at 2.
The Districts' arguments are similar and specifically focused on Section 10 of Idaho
Power s proposed Rule H tariff. Therefore, their Petitions will be addressed together.
First, the Districts maintain that the highway districts possess exclusive jurisdiction
over the public rights-of-way under their authority. Thus, they argue that Section 10 of Rule H is
beyond the jurisdictional authority of the IPUC because it seeks to affirmatively regulate the
state s public road agencies, entities of government, third parties, and developers and impose
upon them the duty to pay for mandatory utility relocations in an unreasonable, one size fits all
approach.ACHD Petition at 7.
Second, the Districts maintain that Section 10 is unconstitutional and an illegal
attempt to abrogate or amend the common law rule that utilities placing their facilities along
streets and highways (in public rights-of-way) gain no property right and must move their
facilities at their own expense upon demand. Finally, the Districts seek clarification as to the
definitions for "third-party beneficiaries" and "local improvement districts
" ("
LID") in Section
10. They generally allege that the definitions of these terms are too vague. ACCHD Petition at
In its Answer to the petitions, Idaho Power acknowledges that the definition of
LID" should be further clarified. Answer at 17. The Company also conceded that the filing of
written briefs is a proper means of addressing legal issues. Id. at 19.
Commission Decision: The Commission acknowledged the limits of its authority in
Order No. 30853 by stating that "Section lOin no way grants Idaho Power or this Commission
authority to impose (relocation) costs on a public road agency." Order No. 30853 at 13. We
further clarified that "(j)ust as the Commission cannot compel the highway agency to pay for the
relocation of utility facilities in the public right-of-way made at the agency s request, the agency
cannot restrict the Commission from establishing reasonable charges for utility services and
practices.Id. However, given the complexity ofthe constitutional and jurisdictional arguments
posed by the Districts on reconsideration and the Company s acknowledgement that the term
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INTERLOCUTORY ORDER NO. 30883
LID should be clarified, the Commission finds it appropriate to grant their petitions regarding the
disputed language contained in Section 10. In order to adequately address the issues raised on
reconsideration, the Commission first directs that Idaho Power update the language of Section
, including a clarified definition of "third party beneficiary" and "local improvement district."
Idaho Power shall file its updated Rule H, Section 10 with the Commission and the parties no
later than August 28, 2009.
After Idaho Power clarifies its proposed Section 10 language, the District parties may
file additional briefs (if necessary). Pursuant to Rule 332, we adopt the following schedule for
reconsideration of Section 10:
Action
Idaho Power file amended Section 10
Date
Oral argument
August 28, 2009
September 2009
September 21 , 2009
To be determined
Districts file briefs
Idaho Power response brief
BCA's PETITION
In its Petition, BCA requests reconsideration of the Commission s findings and
conclusions regarding: (1) terminal facilities allowances; (2) per-lot refunds; and (3) vested
interest refunds. If reconsideration is not granted, BCA requests that the Commission clarify
why it is departing from existing policy regarding investment in distribution facilities. Finally,
BCA requests a stay of the Commission s Order No. 30853 pending a final decision on its
Petition for Reconsideration.
First, BCA alleges in its Petition for Reconsideration that the Commission s Order
approves an inherently discriminatory rate structure for line extensions by imposing unequal
charges on customers receiving the same level and conditions of service." BCA Petition at 1.
BCA seeks reconsideration "to establish an appropriate value of current Company embedded
costs for distribution facilities, a method to true up those costs over time , and a fair method for
line extension costs, allowances and refunds to be paid going forward.Id. at 10.
BCA also disputes the Commission s elimination of per-lot refunds and the decision
to leave the five-year vested-interest refund period undisturbed. BCA argues that the
NOTICE OF RECONSIDERATION SCHEDULE
INTERLOCUTORY ORDER NO. 30883
Commission provides no reasoning for its decision to maintain a 5-year vested-interest refund
period as opposed to adopting the 10-year period suggested by BCA. Id. at 2.
Commission Decision: The Petition for Reconsideration filed by BCA is granted in
part and denied in part. The Commission finds it appropriate to grant reconsideration on the
limited issue of the amount of appropriate allowances. As stated in its final Order
, "
(t)he
Commission recognizes that multiple forces put upward pressure on utility rates.Order No.
30853 at 1 O. Allowances are intended to reflect an appropriate amount of contribution provided
by new customers requesting services in an effort to relieve one area of upward pressure on rates.
BCA may address what allowance amount is reasonable based on the cost of new distribution
facilities.
Pursuant to Rule 332, we adopt the following schedule for the limited reconsideration
of how the allowances in Order No. 30853 were calculated and whether the calculation had a
reasonable basis:
Action Date
September 2009
September 25, 2009
BCA file direct testimony
Responsive testimony filed
Technical hearing To be determined
We deny reconsideration of the five-year vested-interest refund period and the per-lot
refunds for several reasons. First, our procedural Rule 331 requires that petitions for
reconsideration "set forth specifically the ground or grounds why the petitioner contends that the
order or any issue decided in the order is unreasonable, unlawful, erroneous or not in conformity
with the law." IDAP A 31.01.01.331.01. BCA's petition fails to specifically address why the
five-year vested-interest refund period or the elimination of the per-lot refund is unreasonable or
erroneous.
Second, as we stated in our prior Order
, "
BCA's request to extend the refund period
to ten years is not supported by documentation or cogent argument." Order No. 30853. In that
Order we denied Idaho Power s request to shorten the period to 4 years and declined to extend
the period to 10 years. Instead, we maintained the current refund period of five years. The
Company s current administrative system is based upon five years. Staff also commented that
with the current economic conditions "more refunds will be made in the fifth year now that
NOTICE OF RECONSIDERATION SCHEDULE
INTERLOCUTORY ORDER NO. 30883
building activity has slowed.Staff Comments at 12. Without elaboration, Idaho Power also
opposed BCA's recommendation to increase the period to 10 years. Response Comments at 10.
Given this record we find that BCA did not provide sufficient or persuasive evidence to support
its proposal to move to a 10-year lot refund policy. Consequently, we determined that the status
quo of five years should be continued and deny BCA's request to change the vested-interest
refund period.
Finally, as we explained in our prIor Order, increasing the amount of up-front
allowance was in part to balance the elimination of the per-lot refunds. Order No. 30853 at 12.
Elimination of the per-lot refund has a direct impact on the general body of ratepayers because
the Company s rate base will no longer grow by the refunded amounts. BCA does not address
why an up-front reduction in developer contribution through an increased allowance is somehow
inferior (and therefore unreasonable) to a subsequent refund policy. Moreover, allowing
developers a reduced up-front contribution in lieu of a refund reduces the developers ' speculative
risk that properties will sell.
As set out above, we grant limited reconsideration on the issue of the initial
allowance. BCA will have an opportunity to present evidence of whether the allowance amount
is sufficient.
Finally, we deny BCA's Petition for a stay. Idaho Power s Rule H changes will not
become effective until November 1 , 2009. Given the delayed effective date, we find there is
sufficient time to conduct reconsideration and issue our Order on reconsideration prior to the
approved effective date.
ORDER
IT IS HEREBY ORDERED that the Petitions for Reconsideration of Ada County
Highway District, City of Nampa and Association of Canyon County Highway Districts are
granted. Reconsideration shall be accomplished as set out above.
IT IS FURTHER ORDERED that Idaho Power submit an updated Rule H, Section
, consistent with the directives provided in Commission Order No. 30853 no later than August
2009.
IT IS FURTHER ORDERED that the Building Contractors Association s Petition for
Reconsideration is granted in part and denied in part. More specifically, reconsideration is
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INTERLOCUTORY ORDER NO. 30883
granted on the issue of allowances and denied on the issues of per-lot refunds and vested-interest
refunds.
IT IS FURTHER ORDERED that the Building Contractors Association s Petition for
Stay is denied.
IT IS FURTHER ORDERED that the parties conform to the schedules set out above.
The Commission will issue an Order scheduling the date( s) for the Districts' oral argument and
BCA's technical hearing.
THIS IS AN INTERLOCUTORY ORDER. The Commission has not finally decided
all of the matters presented in this case because it has granted reconsideration on at least some of
the issues.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /1-fl\
day of August 2009.
Ll~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~6J
. D. J well. C mission Secretary
O:IPC-08-22 ks5
NOTICE OF RECONSIDERATION SCHEDULE
INTERLOCUTORY ORDER NO. 30883